I’ve been a big baseball fan since I was 7 and one of the great things is remembering when baseball stars were just minor league prospects. I remember when Mets stars like Dwight Gooden, Daryl Strawberry, and David Wright were touted as the next big thing. Of course, Gregg Jefferies never became the second coming of Ty Cobb.
I have always been a champion of smaller 401(k) plans because they have many issues and offer a great opportunity for plan providers because I believe that the small plans of today are the big plans of tomorrow.
There is a new report from research and consulting firm Celent titled Big Rewards Come in Tiny Packages: Why Small Retirement Plans Offer a Huge Opportunity for Plan Providers, Sponsors, and Advisor. They also see the opportunity that smaller plans have to the retirement plan marketplace.
Many of these small plans will grow in size and more regulations such as fee disclosure regulations and the crackdown that will follow will give them pause. Giving them pause will also make them seek help and if you’re a plan provider, there is opportunity.
I have always written that smaller plans tend to have bigger headaches and that’s because the marketplace for these plans tend to have high fees and not much fiduciary help.
I’m not suggesting that you seek smaller plans if they are completely different from the focus of your business, but it’s a good idea to take a look.